Unlicensed real estate developers may find their projects blacklisted if they fail to register with the Ministry of Economy and Finance, a ministry official said yesterday.
The MEF published the names of three developers in a local paper last week and has promised to warn consumers of other unlicensed projects, Mey Vann, director of the Department of Industry and Finance at the MEF, said. Real estate scams have plagued the Cambodian market since 2007, he added.
Consumers put down payments on unfinished residential and commercial projects only to find developers absconding with their cash, Mey Vann said.
However, the recent recovery in the Kingdom’s real estate market has prompted the government to rein in illicit property transactions, he said.
“We want to avoid putting the buyer at risk. We especially want to stop them from buying from unlicensed companies.”
Compliance with real estate and construction law, which requires developers to get licences before building, will strengthen the country’s property market, National Valuers Association of Cambodia president Sung Bonna said yesterday.
“We are calling on all real estate developers to follow the existing law in order to make the industry more attractive,” he said.
Poor implementation of the law will mar the image of real estate in the Kingdom and lead investors – local and foreign – away from the market, Sung Bonna said.
The crackdown presently applies only to Phnom Penh developments but will extend to other provinces in the upcoming months, Mey Vann said. He claimed legal action could eventually be taken against companies that don’t comply.
Publicising unlicensed developers has been effective. Since the MEF’s warning last week, all three companies have applied for licences, according to Mey Vann, including the Borey Villa Toul Sangke development.
“We were too busy with our development and work here. That’s why we applied for the license a bit late,” said Kak Eim, an accountant for the development, yesterday.
Construction on the project began about a year ago, but Borey Villa Toul Sangke won’t receive the licence for another few weeks, Kak Eim said.
The company plans to buy advertising to publicise their licence, he said.